first try converting your .avi files to Apple format. you can do this with iPad Video Converter(ipad-converters.org) (file>export) . then you can move all your files to itunes for new ipad 3 or iphone. For iTunes or QT, you should select an iTunes-friendly output format, such as MOV, MP4 or M4V

I would like recommend AVPlayerHD, plays all video files on it, plus the built in wifi transfer is great to have if you are traveling and don't have access to your iTunes PC.
Well, actually, you could get and watch movies, videos on iPad for free online, and maybe these howto wiki can do help for you:How to Get and Watch Free Movies on iPad: 6 steps (with pictures)

More Avi help please
I have a shiny ipad3, downloaded AVPlayer and transferred my avi movies but they won't play. They are from my Nikon Coolpix P6000. Any ideas please?

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AVI is just a container, there are multiple differing codecs that can be used within an AVI file. I would guess the AVI on a camera may be a more uncompressed version, not the more common divx or xvid codecs commonly used today. My recommendation would be to convert these files for playing on the iPad.

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